New Delhi: Banks in India have voiced for inclusion of loans towards electric vehicles and green hydrogen under the priority sector lending (PSL), reported the Economic Times.Also Read – Electric Mobility Innovate For India — MG Motor India Launches 4th Season Of Its Developer Program
“Some lenders made these suggestions during various individual interactions with the Reserve Bank of India”, the report quoted an executive aware of the developments. Also Read – 1 Dollar Equals 82 Rupees Soon? Day Not Far Seeing The Indian Rupee's Free Fall
THE EIGHT CATEGORIES LISTED UNDER THE PRIORITY SECTOR LENDING ARE:
- Micro, Small and Medium Enterprises
- Export Credit
- Social Infrastructure
- Renewable Energy
Apart from de-clogging the financial hiccups in these sectors, banks are of the opinion that such a move will help them reach their priority sector lending targets. ET quoted another executive who said lenders are required to buy PSL certificates as they aren’t able to achieve their targets, and therefore, a need for expansion in the priority sector lending categories in required. Also Read – Key Takeaways & Assessment Strategy Behind Reserve Bank Of India's Monetary Policy Decision
A month earlier, the Indian Banks Association (IBA) had set up a large working group including representatives of key banks to brainstorm on the various dimensions of sustainability and green financing.
“Given the growing importance of sustainability issues, it’s very important that we develop capacity at the IBA level for proactive policy-making, especially in sustainable financing,” a senior banker told Financial Express.
The recommendations given by this committee and other lenders to the Reserve Bank of India and the final decision taken by the central bank will have implications on India’s sustainable energy goals including net zero emissions by 2070 and renewable energy sources that covers 50 per cent of electricity requirements among others.